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How Small Retailers Will Be Benefited By Goods and Service Tax (GST)

Indian retail sector is comprised of organised retail and unorganized retail i.e. sale through traditional family or small stores or shops. The share of organised retail in India is still less than 20 per cent and majority contribution is of unorganised sector.

Organized Sector and large tax paper of unorganised sector will be gaining due to uniformity of tax rates all over India and availability of tax credit on all transactions post-GST.

Small retailers with turnover upto 50lakhs can avail benefit of composition scheme where tax can be paid @1% of sales value and also relaxation in maintenance of accounts and records.

The threshold limit for registration under GST for traders has been increased to 20lakhs from existing limit of 5 to 15lakhs depending on the state VAT limits.

E-commerce in already struggling with multiple taxes and entry taxes in various states. GST would help E-commerce to gain immensely due to removal of entry tax and availability of Input credit for all taxes paid.

Small shop or retailers who are selling through e-commerce channel would need to maintain some records and is subject to tax collection at source @ 2% by Ecommerce Company though the same can be adjusted while making payment of tax liability by these small shops.

The way public are supporting the Current Prime Minister and his policies, it is quite evident that even retailers and small shopkeepers would like to join mainstream system provided the tax structure, policies and procedures are simplified and there is not much incentive for evasion of tax.